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Pakistan’s Securities and Exchange Commission (SECP) has proposed amending the Companies Act, 2017 to create a licensing framework for nonprofit Waqf Management Companies. The proposal would let SECP license companies to administer waqf assets under Shariah principles and each waqf’s declared purpose. It is a proposal, not evidence by itself that the framework is in force.
What is SECP proposing for waqf companies?
In an announcement dated September 22, 2025, SECP said it would propose an amendment to the Companies Act, 2017 introducing Waqf Management Companies. Under the proposed model, a company would need an SECP licence to manage and administer waqf assets. It would operate on a not-for-profit basis and be bound by Shariah principles and the objectives declared for the waqf. SECP’s announcement
SECP’s institutional statement described the draft power this way: “The proposed Section 42A empowers the SECP to license companies for managing Waqf assets, which will operate as not-for-profit entities.” The proposed Section 42A is therefore the legal route SECP put forward—not a claim that licensing is already available.
How would the proposed Section 42A protect waqf assets?
SECP said the framework would combine protection of the waqf’s purpose and assets with company-level accountability. These are announced proposal features and should not be treated as confirmed final statutory requirements without checking the enacted law and implementing rules.
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- Preserve the declared purpose: The waqf’s objectives would be immutable and could not be changed or substituted.
- Protect the corpus: Sale, pledge, or other encumbrance of the waqf corpus would be restricted, except where the waqf’s objectives explicitly permit it.
- Require governance and accountability: Companies would be subject to governance, reporting, and fiduciary controls.
- Monitor Shariah compliance: SECP said it would oversee compliance, including monitoring and appointment of qualified Shariah advisers.
- Enable enforcement: Non-compliance could lead to legal penalties and regulatory sanctions.
The practical design aims to keep management of assets distinct from the purpose for which they were dedicated, while adding licensing and oversight. The announcement does not supply detailed procedures, thresholds, or final enforcement rules.
How did the proposal develop?
An SECP concept paper published April 7, 2025 explored ways to modernize waqf administration before the September announcement settled on a Companies Act amendment proposal. The earlier paper considered changes to provincial waqf laws, the Companies Act, 2017, or nonprofit regulations. It also discussed a Section 42 nonprofit structure, a distinct legal entity, a board of trustees or directors, transparent reporting, financial statements, and audits. SECP’s April 2025 concept paper
A later SECP concept paper on proposed Companies Act amendments contains draft Section 42A language for licensing Waqf Management Companies. It refers to SECP oversight and applying relevant Section 42 rules for not-for-profit companies where applicable. Draft text helps explain the intended legal mechanism, but publication as a draft does not make it law. SECP’s proposed-amendment concept paper
What financial structures might the framework support?
SECP connected the proposal to possible modern waqf forms, including cash waqf and investment waqf. It also identified waqf-linked sukuk and dedicated waqf mutual funds as potential developments in Islamic social finance. These were possibilities described by SECP, not products or offerings established by the announcement. The materials do not provide projected returns, market-size estimates, or evidence that these instruments have been launched under Section 42A.
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Has Pakistan passed the waqf companies law?
The official materials identified here show an announcement and draft proposals, not confirmation that the amendment was enacted or that final implementing regulations took effect. SECP’s draft listing includes a Companies Act amendment concept paper dated January 2026, and its draft text includes Section 42A language. The SECP Acts listing is a useful statutory cross-check, but it does not by itself establish that no later legislative action occurred. SECP’s draft rules, regulations and concepts listing · SECP’s Acts listing
Accordingly, the careful description is that SECP proposed a legal framework for Waqf Management Companies. Whether it is now law requires checking the latest Pakistan Gazette, parliamentary record, and SECP notices; proposal language alone cannot answer that question.
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